Porter v. Steven Michael Decristofaro & Brown & Brown of Sacramento, Inc.

WILLIAM THOMAS PORTER, Plaintiff and Appellant, v. STEVEN MICHAEL DECRISTOFARO andBROWN AND BROWN OF SACRAMENTO, INC.,dba POWERS & COMPANY INSURANCE AGENTS ANDBROKERS, Defendants and Respondents.

B284157

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION FIVE

October 23, 2018

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County Super. Ct. No. BC488007)

APPEAL from a judgment of the Superior Court of Los Angeles County, Gregory Alarcon, Judge. Reversed.

Herb C. Rubinstein, and Graham & Associates, Bruce N. Graham, for Plaintiff and Appellant.

Murchison & Cumming, Lisa D. Angelo and Nancy N. Potter, for Defendants and Respondents.

INTRODUCTION

Defendants and respondents Brown and Brown of Sacramento, Inc. dba Powers and Company Insurance Agents and Brokers (Brown and Brown) and Steven Michael Decristofaro (collectively, defendants) contend the trial court properly granted their motion for summary judgment because, with the five-year deadline looming, they presented evidence demonstrating plaintiff and appellant William Thomas Porter (plaintiff) could not provide the testimony of a purportedly indispensable witness - Manuel Uribe, the assignor of plaintiff's claims. Defendants argue their evidence shifted the burden to plaintiff to raise a triable issue of fact, which he failed to do. Defendants also contend the judgment should be affirmed because plaintiff's action is time-barred.

We reverse. Even assuming plaintiff cannot present Uribe's testimony at trial, defendants did not carry their initial summary judgment burden. Viewing the evidence in the light most favorable to plaintiff, we conclude a reasonable jury could find that plaintiff asked defendants, and defendants agreed, to "renew" Uribe's existing policy by procuring a new policy with the same or substantially similar coverage, but defendants instead obtained a policy for Uribe which contained a new exclusion that barred coverage for the loss Uribe subsequently suffered.

Likewise, we conclude defendants failed to carry their initial summary judgment burden of showing Uribe suffered an actual injury that triggered the running of the two-year limitations period when his default was taken in February 2009. Instead, the limitations period began to run when defaultjudgment was entered against Uribe in July 2010, less than two years before plaintiff filed this action as Uribe's assignee.

FACTUAL BACKGROUND¹

A. Brown and Brown procures a "renewal" policy for Uribe's plumbing contractor business.

Over a period of several years Manuel Uribe, a plumbing contractor, purchased general liability insurance policies for his business using the brokerage services of Brown and Brown.² Initially Uribe purchased a policy procured by Brown and Brown that was issued by Lincoln General Insurance Company (Lincoln) for the policy period of May 31, 2003 to May 31, 2004. The policy excluded coverage for work on condominiums, apartments and townhouses involving more than 15 units. Uribe purchased a renewal policy with the same exclusion for the policy year May 31, 2004 to May 31, 2005 (2004-2005 policy).

In February 2005, Brown and Brown sent Uribe a letter, labeled "IMPORTANT - RENEWAL NOTICE," with instructions to provide specified information that Brown and Brown needed to arrange renewal of Uribe's 2004-2005 policy. (Original bold and underlining.) The letter referenced "GeneralLiability policy renewing on 05/31/2005" and listed Uribe's policy number. It stated that Brown and Brown "specializes in contractors' insurance . . . ."

A "Renewal Supplemental" form attached to the letter asked Uribe to "List current projects underway or planned for the next year . . . ." Uribe provided the information requested and listed his upcoming work on the "Westmoreland" project.

Steve Decristofaro worked as a producer in the sales department of Brown and Brown. Uribe was one of Decristofaro's clients. Descristofaro was responsible for handling Uribe's request for coverage and getting him a "renewal quote." At his deposition, Decristofaro testified he should have asked Uribe about the Westmoreland project. He said if Uribe had told him the Westmoreland project was a mixed-use, commercial/residential project, Decristofaro would have remarketed the account by calling an underwriter to see if the new exposure was something the underwriter could accept, and if he had found a carrier that would accept that exposure, he would have submitted an application and requested a quote.

After Brown and Brown received Uribe's response to its February 2005 letter, it sent Uribe a supplemental questionnaire for Uribe's signature. One of the questions asked: "Any new construction, including warranty repair work for the builder, of condominiums, townhomes, apartments or tract homes performed by the applicant, or any conversion to residential or commercial condominiums?" The box next to the question was checked no. Uribe signed and returned the form.

With Uribe's paperwork completed, Brown and Brown obtained a "'renewal'" policy from Lincoln for the policy year May 31, 2005 to May 31, 2006 (2005-2006 policy). The policycontinued to exclude coverage for condominiums, townhouses or apartments with more than 15 units.

In addition, however, the 2005-2006 policy contained an endorsement which had not been included in Uribe's previous policies. At the top of the page, the endorsement stated: "THIS ENDORSEMENT CHANGES THE POLICY - PLEASE READ IT CAREFULLY." (Original bold and underlining.) The endorsement, titled "EXCLUSION - NEW CONSTRUCTION OF CONDOMINIUM, TOWNHOUSE, APARTMENT, OR MULTIPLE USE RESIDENTIAL/COMMERCIAL BUILDINGS," provided in part: "This exclusion . . . applies to any project which converts all or any part of an existing structure into a 'condominium, townhouse, apartment, or multiple use residential/commercial building project.'" There is no evidence that Uribe asked to have this exclusion included in his policy.

On May 24, 2005, Descristofaro confirmed the issuance of the "renewal" policy, and the policy described itself as a "RENEWAL OF" the 2004-2005 policy. Uribe was invoiced and paid for his 2005-2006 "General Renewal" policy.

Descristofaro does not recall ever telling Uribe that he could or would procure an insurance policy which was the same as or substantially similar to the 2004-2005 policy. Decristofaro's custom and practice in 2005 was that he would not tell any client whether the client's insurance policy would cover a particular type of work.

B. Plaintiff brings suit for injuries sustained while working for Uribe on a construction project.

On March 26, 2006, plaintiff, while working for Uribe, was injured while working on the Westmoreland construction project in Hollywood. The project involved the conversion of an existing building into a mixed use commercial/residential structure.

On March 4, 2008, plaintiff brought a personal injury action against the developer and general contractor of the Westmoreland project (collectively, Creative).

Creative brought an indemnity cross-complaint against Uribe, the project's plumbing subcontractor. In its September 2, 2008 amended cross-complaint, Creative "den[ied] that [it was] liable to Plaintiff or anyone else for any of the damages claimed" in plaintiff's complaint. Creative "allege[d] that there was negligence on the part of Plaintiff in causing the injury to himself, and also that there is a bar to recovery from [Creative] since Plaintiff assumed the risk of doing work at the construction site." "In the event that [Creative was] found to be liable to Plaintiff . . . , which [Creative has] denied or continue[d] to deny, then [Creative] allege[d] that [Uribe] should be liable for those damages . . . ."

C. The insurer declines to defend Uribe, who assigns his claims to plaintiff.

Uribe tendered his defense to Lincoln under his insurance policy. On December 10, 2008, Lincoln denied Uribe a defense based on the 2005-2006 policy's exclusionary endorsement.

On February 24, 2009, Creative took Uribe's default on the cross-complaint. On July 19, 2010, default judgment for $735,103.92 was entered against Uribe on the cross-complaint. Uribe assigned to plaintiff his claims, if any, against defendants.

PROCEDURAL BACKGROUND

On July 9, 2012, plaintiff, as Uribe's assignee, filed a complaint against Lincoln and defendants. Plaintiff asserted claims against Lincoln under Insurance Code section 11580 and for reformation of the policy based on fraud and unilateral mistake. Plaintiff asserted a declaratory relief claim against Lincoln and defendants concerning the existence of coverage under the 2005-2006 policy for plaintiff's injuries.

Plaintiff also asserted claims for negligent failure to procure requested coverage,³ negligent representation,⁴ and breach of fiduciary duty⁵ against defendants and Lincoln.

In November 2012, defendants filed a demurrer. Plaintiff opposed the demurrer and the trial court overruled it. Defendants then filed an answer.

In 2013, defendants filed a motion for summary judgment or, in the alternative, summary adjudication of issues (the 2013 motion). Lincoln also filed a motion for summary judgment or adjudication.⁶ Defendants asserted: (1) plaintiff's claims were time-barred; (2) defendants fulfilled their duty to procure the coverage Uribe requested and had no legal duty to procure more insurance beyond what Uribe requested; as a result, there were no triable issues of material fact concerning plaintiff's claims for declaratory relief, negligent failure to procure requested coverage, negligent representation, and breach of fiduciary duty; and (3) defendants cannot be liable because Lincoln improperly denied...